Samwise Quick Reference Handbook
To streamline our daily blogs and conserve space, we’ve organized key resources into a convenient, collapsible dropdown menu below. A sort of Quick Reference Handbook if you will -- as our friends in aviation might call it. By clicking the menu below, you’ll have qu...
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$570 gets us within 1% of the ATH which is bonafide retest, if that happens and it fails to make new high, odds we are already in correction skyrocket?
Yeah so if we get up to $570 and the QQQ peaks and then starts to fall back toward $551 again, then chances are we’re in a correction. We’ve seen so many past peaks happen in this precise manner.
Yeah, that’s what I’m leaning toward now, probably by Friday and into next Monday is my guess
Does the AI tech boom have an effect of bucking the trend of any historical trade patterns? It seems its a technological change. Simlar to the internet but not exactly in a Dot.com bubble it seems. Or a 2008 Housing bubble.
The answer to that question can be found here. I’ve given a general response applicable to all questions like this here. Read the 5:10 pm post. It’s directly on point to this type of question. It would be under “important disclaimer #2.”
I need to write an article on this topic so I can quickly and easily reference it. I’ll do that soon. Because this post I’m linking below is more rough draft or personal thoughts on the issue. But I think a bonafide article is really needed. I’ll process this through chat and see if it can give me a good tl;dr on it:
https://sam-weiss.com/oversold-bounce-either-a-retest-of-the-highs-or-a-rebound-ahead-of-2nd-leg-down-in-the-segment/
ChatGPT failed to deliver me a summarized response that makes any sense at all. Basically, here’s what it comes down to.
(1) there’s no way to know whether any one event will somehow impact or buck the trend.
(2) from 2000 to 2025 (25-years) we’ve only seen TWO events buck the trend. First, was the dot-com bubble. But even that had caveats. We had very high volatility. We didn’t just go stirahgt up without corrections. We had some rather violent swings. Second, we had the Covid rally that had TEN separate major pull-backs. We had four pull-backs that exceeded 6%. That’s like 4 mini corrections.
There’s no way to know. You’d have to know the motivations behind the entire supply and demand side of the curve and determine that the demand side is going to somehow be substantially stronger than every other previous environment in a very quantifiable way.
Anything less would be just a guess. Like we don’t know the cumulative total of all capital looking to chase the rally higher and the cumulative total of all investors looking to take profits. We don’t know their motives or where they want to sell. What their threshold is. Whether there is more capital on the buy side than there are willing sellers. And we don’t know whether historically the supply/demand imbalance is somehow greater today than in every previous environment.
That’s what you’re asking here. We can’t answer that. No one has the resources to do so. It would be a guess. That’s it. Nothing more, nothing less.
Personally, I chose to always side against this time is different specially because it’s extremely rare. No different than betting on whether any particular commercial air flight is going to end in disaster. The chances of that happening are 1 in 7 million and hard to predict. So I wouldn’t bet on it.
Obviously the odds aren’t that low here, but they are far far lower than the odds of the market conforming with the trend.
Might be difficult to get this granular to the cases above Sam, but are the swings we’re seeing over the past week or so indicative of this maybe not be a long drawn out top? It seems like after most of July felt like a slow move up, we’re getting some relatively large swings in both directions day-to-day and even intra-day (and already $2 within what we outlined as retest territory)
Along the same lines, is $570 still the target for the next round of moves, or has the aggressiveness of this move up changed the outlook?
$570 is still a place where we’ll look to make trades. But we need to see something like $570.65 or something like that. We need to get above $570. Hopefully we’ll get there tomorrow.
Volatile increases anytime you get a big pull-back. So the lower volatile during the 4th segment makes sense and that environment completely ended the moment the QQQ reversed and then sold-off 4%.
We get increased volatile as we near a final peak. Alternatively, if the QQQ begins a 5th segment, then volatility will drop off again as the QQQ climbs.
Makes sense when you lay it out like that. Thanks Sam